Ensysce Biosciences buys Cy Biopharma, agrees to two-tranche private placement of Series C stock

Ensysce Biosciences, Inc. (Nasdaq: ENSC) completed its acquisition of Cy Biopharma, Inc. on August 5, 2026. It also agreed to a private placement of Series C Preferred Stock. The company issued Cy's equityholders the right to receive 282,122 shares of Series C Preferred Stock under the merger agreement. The Form 8-K, filed August 6, 2026, puts the placement at an aggregate purchase price of about $43 million over two tranches.

The merger

A merger subsidiary merged into Cy, which became a wholly owned subsidiary of Ensysce. Cy then merged into a second merger subsidiary, which survives as a wholly owned subsidiary. The company says the merger is intended to be a tax-free reorganization for US federal income tax purposes. Each share of Series C Preferred converts into 1,000 shares of common stock, subject to conditions.

Ensysce's board approved the deal unanimously, and neither the merger nor the placement needed a vote of Ensysce stockholders. Stockholders will vote later on converting the Series C stock under Nasdaq rules, and on a charter amendment that would authorize more common shares and, if needed, a reverse stock split to keep the company compliant with Nasdaq listing standards. Certain stockholders have signed support agreements to vote for those proposals. Certain Cy stockholders and certain Ensysce directors and officers agreed to a 180-day lock-up on sales of their shares.

The placement and its second tranche

Ensysce agreed to sell 120,260 shares of Series C Preferred to investors. At the initial closing, expected August 7, 2026, it will issue 66,811 shares at $321.79 per share. The press release puts expected gross proceeds at about $21.5 million at that closing, before placement agent fees and other expenses. A second tranche of 53,449 shares at $402.24 per share closes only if a clinical trial milestone is met. The release says the round was led by Ally Bridge Group, with Perceptive Advisors, Dellora Investments, Ikarian Capital and Adage Capital Partners, L.P. also taking part.

Cantor and UBS Investment Bank acted as placement agents for the private placement. The company must file a resale registration statement within 90 calendar days after the financing closing date. The release also says Cy raised $17.1 million of cash through a convertible note financing before the acquisition.

Dilution

The release says that after stockholder approval, Cy's former equityholders would hold about 73.86% of Ensysce on a fully diluted basis, excluding shares issuable at the milestone closing. Ensysce's existing holders would hold about 7.57%, and new investors in the placement about 17.49%. It puts the combined fully diluted equity value at about $101.4 million, excluding transaction fees. That is the dilution a current Ensysce holder would take on.

The company also agreed to end its prior financing arrangements with 3i, LP. In an Omnibus Amendment and Termination Agreement signed the same day, Ensysce cancelled a November 13, 2025 securities purchase agreement and eliminated the Series B Preferred Stock. All outstanding Series B shares will convert into 3,229,276 shares of common stock.

Advisers and fees

Tungsten Partners LLC was Ensysce's financial advisor. The company paid Tungsten $100,000, issued it 100,000 restricted stock units and has paid a $15,000 monthly advisory fee since the engagement began in March 2026. H.C. Wainwright & Co., LLC provided the fairness opinion. It received a transaction advisory fee of $250,000 and a fairness opinion delivery fee of $400,000. Troutman Pepper Locke LLP was Ensysce's legal counsel. Orrick, Herrington & Sutcliffe LLP was legal counsel to Cy Biopharma, and Wedbush Securities Inc. was Cy's exclusive financial advisor.

The lead drug

Cy is developing CY-200 for complex regional pain syndrome type 1, which has FDA orphan drug designation. The release says the combined cash is expected to fund CY-200 through Phase 2 proof-of-concept data and into registrational development. Those trial results are not in hand, and the second placement tranche depends on a milestone the company has not yet reached. James Morrison, Cy's founder and chief executive, will become president of Ensysce and join its board.

Ensysce itself was small before the deal. Its SEC figures show it used $7.8 million in operations in 2025, on revenue of $5.1 million.

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